North-South divide: Leaders seek the answers for country carved in two

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IT WAS no coincidence that just a fortnight after becoming Prime Minister in May 2010, David Cameron chose Yorkshire as the location for his first major speech.

Mr Cameron came to Shipley because he had a specific message to tell – that his was a Government that would not leave the North behind.



Setting out his broad economic plan for the first time, Britain’s youngest Prime Minister in almost 200 years made clear there would be three pillars to his approach beyond deficit reduction – cutting taxes and red tape, supporting enterprise and, crucially, “rebalancing the economy”.

“Today our economy is heavily reliant on just a few industries and a few regions – particularly London and the South-East,” Mr Cameron told the nation.

“An economy with such a narrow foundation for growth is fundamentally unstable and wasteful – we are not making use of the talent out there in all parts of our United Kingdom. We are determined that should change.”

Fast-forward three-and-a-half years, however, and questions are being asked whether anything really has. By almost every economic measure, the north of England remains far behind the South-East.

Unemployment is still stubbornly higher across all parts of the North, despite the number of people in work nationally reaching record levels. Economic output is almost a third below that of the South – household income levels too.

Home owners in the South-East are enjoying yet another property boom, but in Yorkshire, prices have been heading in the opposite direction.

Indeed, this was the only region in the country where the average house price went down last year. In the North-East and North-West, prices remained broadly static. In London, they soared by more than eight per cent.

It would be churlish, of course, to blame Mr Cameron for all of this.

It is a story which has been played out over more than 100 years. Every British leader has promised to address the widening North/South divide. Every British leader has failed.

Rewind just over half a century, to 1962, as Britain emerged from another grim recession. Another Conservative Prime Minister – Harold MacMillan – was making a very similar case.

He would strive, he told the country, “to prevent two nations developing geographically – a poor North, and a rich and overcrowded South”.

The years pass, it seems, but the underlying issues remain.

But England wasn’t always this way. Go back further – much further – to the middle of the 19th century, and it was northern England that was booming. The industrial revolution was well under way, and it was pioneering cities in the North that were leading the charge.

Mill owners, factory bosses and rail entrepreneurs across the North were pushing Britain to the very forefront of the world stage, and bringing enormous wealth into northern cities as they went.

Stunning Victorian city centres sprung up across the North, resplendent with grand town halls, squares and trade halls. People looking for work did not simply head to London – they went to Bradford, to Leeds, to Manchester, to York. Northern cities were the jewels in Victorian England’s gleaming crown.

The slow but seemingly unstoppable decline of Britain’s once-proud industrial base that followed, from some time around the start of the 20th century, is well documented. One by one, key sectors have disappeared – and it is the North that has borne the brunt. With each world war, and each recession since, the North fell further behind.

Perhaps unsurprisingly, the main political parties are quick to point the finger at one another for the fact the situation persists to this day.

Labour claims the Government is elitist in its outlook, and does little to help the North. The coalition partners say Labour should have done far more to address the divide during its 13 years in power.

Certainly, by most economic measures, that gap between North and South widened between 1997 and 2010.

But the publication this month of a report on the relative strength of different parts of the UK economy concluded the gap with London and the South-East has continued to grow over the past three-and-a-half years.

“The clearest trend is the increased concentration of Britain’s economic competitiveness and growth capacity within London – in particular the City,” said Prof Robert Huggins, the author of the UK Competitiveness Index.

One key issue is that successive Governments have done little or nothing to address a long-standing bias in Treasury spending that sees funding flowing into London and the devolved nations, at the expense of the English regions.

Figures released by the Treasury this week show how this Government – just like the last – is still lavishing money on the South-East’s transport networks, cultural assets and housing developments in a manner that the North can only dream of.

There is a risk, however, that stereotypes about North and South can lead to a simplistic analysis of a far more complex problem.

“Whether we look at productivity, unemployment, house prices, graduate retention or population growth, it is easy to see a stark divide running loosely between the Severn Estuary and the Wash,” says Ed Cox, director of Britain’s only northern-based think-tank, IPPR North.

“But there is a danger the statistics and the maps lead us into some unhelpful assumptions.

“First, that we should all be like London. London is a global city. By most measures, it stands apart not just from the North, but also from almost any other regions in Europe. We need to be careful not to compare apples with pears.

“We should also be careful what we wish for. London is by various counts the most unhappy place in the country, riven with social inequality.

“We should also recognise that differences within regions can sometimes be as stark as those on the national level – consider for example Harehills and Harrogate. Inequalities in England are complex, and require tackling on different levels and in different ways.”

Indeed, for all the political debate, there is actually a consensus emerging among all three main parties about the broad steps required to help the North begin to grow.

All politicians agree that infrastructure is key – and transport in particular. To that end, the coalition has announced a raft of investment programmes including the high-speed rail link between London and the North, the electrification of key rail lines, trolley bus and tram-train networks for Leeds and Sheffield respectively, and a massive upgrade of the key A63 route into the Port of Hull.

The problem, however, is that work has yet to begin on a single one of these projects. Mark Goldstone, the director of policy at the Leeds, York and North Yorkshire Chambers of Commerce, says the schemes have the potential to be “transformational” for northern businesses – but are taking too long to get going.

Investment in skills training and apprenticeships for young people is also widely accepted as being key, as is the roll-out of superfast broadband to every part of the country. A report published by the Government earlier this month assessing the impact of constructing high-speed internet networks across the UK found that 89 per cent of the benefits would be felt outside London and the South-East.

But there is a broader agenda, too, beyond these big infrastructure projects, that politicians of all creeds are increasingly convinced will allow the North to thrive.

Britain remains one of the most centralised countries in the western world, with almost all major policy and spending decisions taken in Whitehall.

An in-depth study by the Conservative peer Lord Heseltine concluded last year that only the mass devolution of powers and spending to local areas could give northern towns and cities the opportunity to develop their own local solutions to economic growth, with tailor-made skills training programmes and decisions on infrastructure investment made by the people who understand the local area best.

Sir Richard Leese, the leader of Manchester City Council and chair of the Core Cities group representing England’s largest urban areas, issued a plea for more powers this week. “The UK is now one of the most centralised states in the world,” he said. “The lack of freedom is holding back our cities from doing more to create growth.”

Business leaders broadly agree. “In helping to create the environment for companies to thrive, this region is best placed to decide on its own economic and infrastructure priorities. However, it lacks the devolved powers and funding to deliver,” Mark Goldstone added.

“We would want to see local enterprise partnerships taking a lead role in decision-making and given access to funds to commission delivery, without Government departmental strings attached.”

Publicly, at least, the coalition is committed to devolving power. Last year’s City Deal devolution packages for England’s largest urban areas were a start, along with measures such as the localisation of business rates. But Lord Heseltine’s vision was only partly delivered – the £15bn a year he said should be devolved to council and business leaders via the local enterprise partnerships dwindled to just a fraction of that figure. It is, he says, “a start” and he is confident devolution will grow as the years pass.

Crucially, Labour is now onside, with its own experienced peer former Transport Secretary Lord Adonis now drawing up the party’s own devolutionary policies for its next 
election manifesto. Rather than attacking the Government’s “localist” approach, they seem likely to say it should go significantly further.

Many believe that if a genuine power shift away from Whitehall can be achieved, the North may at last start to grow. Mr Cameron, meanwhile, insists the Government’s overall approach is beginning to work, with private sector employment at its highest ever level in Yorkshire after three years of his leadership.

“It is starting to have an impact,” he told the Yorkshire Post last month. “But I want the impact to be even greater.”

The truth is that it will take far more than the policies of one Government to start to bridge a divide that dominated England’s economy for much of the last century – and now threatens to do the same in this one.

Your views are needed on this divisive issue

The Big Debate series will air the rich and varied views of Yorkshire on the issues that influence the lives of people living here and that impact on the prosperity of our region.

The series launched in October with the high-speed rail line HS2.

Today we look at the North-South Divide because Yorkshire is still missing out on vital investment, the people who live and work here deserve better and things appear to be getting worse.

In the last financial year Ministers spent less than half the sum per head in Yorkshire on transport, housing and cultural services than they did in either London or Scotland.

The figures add to fears that Britain is once again on the cusp of an unbalanced economic recovery.

Yorkshire Post editor Jeremy Clifford said: “One of the fundamental flaws in the way that funding is provided by central Government is that it is using historic data that does not reflect a current need.

“The Government is failing to properly address this critical imbalance. Given a fairer playing field, growth would be stimulated in Yorkshire, lessening the need to rely on Government funding through welfare.

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